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The US Securities and Change Fee has closed its investigation into the Aave Protocol with out recommending enforcement motion, in keeping with a discover dated December 16.

The choice ends a multi-year probe into one of many largest decentralized finance (DeFi) lending platforms and removes a serious regulatory overhang for the sector.

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Investigation Closed With out Enforcement

In its discover, the SEC stated it had concluded its investigation into the Aave Protocol and doesn’t intend to suggest enforcement motion right now.

Nevertheless, the company emphasised that the closure doesn’t represent an exoneration and doesn’t stop future motion ought to circumstances change. The discover follows normal SEC observe underneath Securities Act Launch No. 5310.

After 4 years, we’re lastly able to share that the SEC has concluded its investigation into the Aave Protocol.

This course of demanded important effort and sources from our group, and from me personally because the founder, to guard Aave, its ecosystem, and DeFi extra… pic.twitter.com/aZeLrZz5ZQ

— Stani.eth (@StaniKulechov) December 16, 2025

The investigation started round 2021–2022, throughout a interval when the SEC intensified scrutiny of crypto lending, staking, and governance tokens.

Aave, a non-custodial DeFi protocol, permits customers to lend and borrow digital belongings by means of automated good contracts. The protocol operates with out intermediaries and is ruled by holders of the AAVE token.

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Aave Income and Governance Beneath the Highlight

The SEC choice comes as Aave faces separate inside scrutiny over income and governance.

Earlier this week, DAO members raised considerations {that a} front-end infrastructure change could have redirected swap price income away from the Aave DAO treasury. The problem adopted a shift from ParaSwap to CoW Swap on Aave’s official interface.

Extraordinarily regarding.

The stealth privatization of roughly 10% of Aave DAO’s potential income, leveraging model and IPs paid for by the DAO, represents a transparent assault on the most effective pursuits of the $AAVE Token holders.

We are going to put together an official response with @AaveChan. https://t.co/opoG3I7x7s

— Marc ”七十 Billy” Zeller (@Marczeller) December 12, 2025

Governance delegates stated the change may cut back DAO income by as much as $10 million yearly, relying on buying and selling volumes. 

Aave Labs responded that the front-end is a separate product and that prior income sharing was voluntary.

For now, Aave emerges from regulatory scrutiny with out penalties, which has been a typical sample because the SEC backtracks from crypto enforcement underneath Paul Atkins.

Nonetheless, the protocol faces ongoing questions round governance, decentralization, and worth seize as DeFi matures.